FOCAC; NYC PRC Consul General leaves; Real Estate; Growth estimates; National Security for students; Tedros on COVID-19
Earlier today I published this week’s episode of Sharp China- The US-China Strategic Channel; Continued Drama in the South China Sea; The Next Phase of Chip Controls; Black Myth: Wukong. From the show notes:
On today’s show Andrew and Bill begin with a look at the dialogue between National Security Advisor Jake Sullivan and Director of the Office of the Central Foreign Affairs Commission Wang Yi. Topics include: Why meetings with Wang are valuable to the U.S. side, the progress the meetings have (and have not) yielded, and the strategy going forward. From there: Yet another clash between the PRC and the Philippines over the weekend, continued questions about when and how the U.S. may intervene, and updates on the next phase of chip controls as the Netherlands weighs a policy change, the PRC threatens retribution against Japan, and a cloud computing loophole persists. At the end: An emailer asks about Xi‘s speeches, and thoughts on the success of the best-selling video game in the world this week, Black Myth: Wukong.
You can listen to it here.
Summary of today’s top items:
1. FOCAC - Xi will give the opening speech Thursday. He had several more bilateral meetings Wednesday and then hosted a banquet for the visiting dignitaries. A Xinhua commentary today from “Zhonghua Lun 钟华论“ likely previews some of Xi’s main themes: “African countries are experiencing a new awakening, realizing that externally imposed models have not brought stability and prosperity. African nations need to explore development paths that suit their own national conditions and firmly grasp their future and destiny in their own hands. At the China-Africa Think Tank Forum held in March this year, scholars from both sides formed the "China-Africa Dar es Salaam Consensus." This consensus emphasizes that the choice of development path should be based on each country's national conditions and indigenous cultural characteristics. It calls for jointly promoting an equal and orderly multi-polar world and an inclusive economic globalization, while breaking down the structural contradictions that restrict the modernization of developing countries. This breaks the myth that "modernization equals Westernization," expands the path options for developing countries towards modernization, and voices the common aspirations of the "Global South." But the African leaders want more than rhetoric, and it is still not clear how much additional financial support and debt restructuring/relief the PRC is offering.
2. PRC Consul General to New York leaves his post - Consul General Huang Ping is no longer in New York. Kathy Hochul, governor of New York said today when asked about the Linda Sun case that she had requested to a senior official at the State Department that he be expelled, and that she was “informed that the consul general is no longer in the New York Mission”. The State Department spokesperson clarified that Huang was not kicked out but had come to the end of his term in August. Expulsion of a Consul General would be a big deal, and the PRC would likely respond in kind.
3. 2024 GDP growth target - The top leadership increasingly seem like the only group who think they can hit the 5% GDP growth target for this year, or at least did at the Third Plenum. Investment banks and economists keep lowering their forecasts, as data continues to show weakness, confidence remains deflated, and the policymakers are unwilling or unable to add more meaningful stimulus. And there is just over one quarter left in the year. On Wednesday the Shanghai Composite broke below 2800 again, and is now barely 100 points higher than its February low. Will the national team try to get it up before the October 1st 75th anniversary of the founding of the PRC?
4. Real estate mortgages - Bloomberg has another story on the policy discussion about allowing existing mortgage holders to refinance. There was a new policy to allow refinancing in 2023 but they did seem to really move the needle on increasing consumer spending, so it is not clear how much of an impact this new possible refinancing policy might have, and the banks will not be happy about it, as they may make less money, unless the PBoC also cuts their rates. And while policymakers discuss possible refinancing measures, mortgage holders continue to pay down their debt, with total mortgage loans outstanding down 2.1% year-on-year at the end of June according to the PBoC.
5. National Security for students - The South China Morning Post has been reading the new “National Security Education Reader for College Students 国家安全教育大学生读本”. In a story Wednesday the paper writes that the books tells college students that “Rock ’n’ roll, pop music and the internet are Western vices that can be used to sow the seeds of “color revolution” among Chinese youth”. The MSS WeChat account today warned students about foreign intelligence agencies targeting young students with job offers, part-time work, and online friendships as "bait" to "lure, entice, and coerce some young students into engaging in espionage activities and other illegal behaviors".
6. WHO Director-General Tedros still not happy with PRC transparency over COVID-19 - WHO Director-General Tedros is still unwilling to rule out any of the hypotheses about the origins of the COVID-19 pandemic, as he reiterated at a press conference today: “We still don’t know how the COVID-19 pandemic began, and unfortunately, the work to understand its origins remains unfinished. SAGO is now finalizing its independent assessment of how the COVID-19 pandemic began. As I have said many times, including to senior Chinese leaders, China’s cooperation is absolutely critical to that process. That includes information on the Huanan Seafood Market, the earliest known and suspected cases of COVID-19, and the work done at laboratories in Wuhan. Without this information, none of us are able to rule any hypothesis out. Until or unless China shares this data, the origins of COVID-19 will largely remain unknown"
Thanks for reading, and listening.